Month: August 2010

Very difficult questions

I have spoken at Jane St. Capital a few times and it is perhaps my favorite audience; everyone wants analytic content and everyone came prepared.  All of the questions were tough, but two in particular I was not prepared for.

First, I was asked "Which is the most underrated statistic for judging the value of an NBA player?"

My attempted answer was the player's presence on a very good, consistently winning team.  There are many players with impressive statistics, including unselfish statistics such as assists and rebounds, who are only of value on bad teams.  We overvalue such players.  Overall, really good teams don't keep bad players and really bad teams don't keep good players.  If a player has never been on a really good team, he might not be so good, with apologies to the earlier Kevin Garnett.

Second, I was asked who is most likely to write a novel about the financial crisis which will stand the test of time.  I do not see any such author around today, but if you have ideas leave them in the comments.  "DeLillo, if he were thirty years younger" was the best I came up with.  Or maybe something from genre fiction.  There are notable works of fiction dealing with the Great Depression, but I can't recall that any of them focus on the financial side.  It's a hard topic to be dramatic about, without being either too simplistic or overly technical.

Corn tamale home recipe

Here is another reader request:

more tyler cowen home recipes. previous installments have been helpful thanks.

Lately I have been buying frozen corn tamales ("tamale de elote") from a Latin supermarket or Shoppers Food Warehouse.  Steam them, wrapped, for ten to twelve minutes.  Serve with El Salvadoran white sour cream on top or to the side.  (Honduran or Guatemalan white sour cream will do in a pinch.)  You also can heat up some Goya small red beans, with a bit of freshly ground cumin and ideally some fresh stock.  For the ambitious, make the stock from celery, black pepper, salt, onion slices, pork neck, and one ancho chile, but the beans taste fine on their own.

It's one of the easiest good meals I know and its a way to bring some deflation into your life.

The Mulligan and Mankiw challenge to extreme Keynesians

To quote Greg:

University of Chicago economist Casey Mulligan offers a challenge to that view.  Casey points out that there is a regular surge in teenage employment during the summer months because more teenagers are available to work (that is, the supply of their labor has increased).  That is no surprise: It is normal supply and demand in action.  But if aggregate demand were the main constraint on employment, this increase in supply should not translate into higher employment during deep recessions such as this one.  But it does!

The link is here.

*City on the Edge*

The author is Mark Goldman and the subtitle is Buffalo, New York.  I loved this book.  It is a splendid portrait of twentieth century America, the connection of industrialism and the arts, the decline of manufacturing and the resulting urban casualties, an applied study of the wisdom of Jane Jacobs, and on top of all that it is the best book I've read on how excess parking helped destroy an American downtown.  I recommend this book to all readers of serious non-fiction.

Tradeoffs

From David Foster Wallace's 1995 essay, The String Theory:

… it's better for us not to know the kinds of sacrifices the professional-grade athlete has made to get so very good at one particular thing. Oh, we'll invoke lush cliches about the lonely heroism of Olympic athletes, the pain and analgesia of football, the early rising and hours of practice and restricted diets, the preflight celibacy, et cetera. But the actual facts of the sacrifices repel us when we see them: basketball geniuses who cannot read, sprinters who dope themselves, defensive tackles who shoot up with bovine hormones until they collapse or explode. We prefer not to consider closely the shockingly vapid and primitive comments uttered by athletes in postcontest interviews or to consider what impoverishments in one's mental life would allow people actually to think the way great athletes seem to think. Note the way "up close and personal" profiles of professional athletes strain so hard to find evidence of a rounded human life — outside interests and activities, values beyond the sport. We ignore what's obvious, that most of this straining is farce. It's farce because the realities of top-level athletics today require an early and total commitment to one area of excellence. An ascetic focus. A subsumption of almost all other features of human life to one chosen talent and pursuit. A consent to live in a world that, like a child's world, is very small.

Hat tip to Tim Carmody filling in at Kottke.

Markets in everything

Artisanal pencil sharpening:

David Rees, the man behind the popular political comic Get Your War On, wants to sharpen you a pencil. Slowly. Attentively. And with a carefully selected sharpener or blade that suits the pencil best. If there are movements for slow food and slow reading, why not for slow writing implements? 

"With an electric pencil sharpener, a pencil is meat," Rees said. "It's this thoughtless, Brutalist aesthetic. For me, it's almost a point of pride that I would be slower than an electric pencil sharpener."

This is how Rees' artisanal pencil sharpening works: You might send him your favorite pencil, but Rees more often selects and sharpens a classic No. 2 pencil for his clients, he promises, "carefully and lovingly." He slides the finished pencil's very sharp tip into a specially-sized segment of plastic tubing, then puts the whole pencil in a larger, firmer tube that looks like it belongs in a science experiment. Throw it at a wall, he says, and it won't break. The cost? $15.

For the pointer I thank Ellen P.

Why is there a boom in temporary hiring?

Trevor Frankel offers his thoughts:

The part that most clearly indicates policy is the problem is the temp hiring. If businesses are hiring temps off the bottom of a recession, it means that they're seeing demand pick up but they're too uncertain to actually hire someone full time. This is usually followed by permanent hiring, but in this recovery, it has not been. The only obvious culprits here are a) higher required wages and healthcare costs (minimum wage, housing interventions and Obamacare are prime candidates here) and b) general lack of confidence in the economy and policy (the political climate in general is the prime candidate here).

Here is some background:

Temp hiring has been off the charts – temp jobs are up 20% year over year, while permanent private sector jobs are down 1%. (source: http://www.ritholtz.com/blog/2010/08/follow-up-on-temp-services-hiring/)

This is not an argument which I have been pushing, but the boom in temporary hiring does lend some support to it.

P = NP?

Here is one discussion of how hard it is to find the betting market in this proposition.  Here is a betting market of unclear size and relevance, on which Millennium math problem will be solved next; it apparently predicts 76 percent for P vs. Np.

Here is an overview of where the entire debate is at, in Wiki form.

All of the pointers are from the ever-curious Chris F. Masse.

Unusual questions from loyal blog readers

To what extent can someone who is starving cannibalize his/her self to stay alive? My logic in asking you this question was not, "I'm curious about cannibalism, let me ask the food critic." It was more along the lines of "This is a really obscure and somewhat far-fetched idea and question, Dr. Cowen would probably be the best person to present it to because of his wide range of knowledge and access to an intelligent readership."

That's from M.E.  My answer is: "to a limited extent."  By the way, I am giving a talk tonight, and there is a (substantial) prize being offered for the best question from the audience.

Correction of Brad DeLong

He is wrong to suggest that I am calling for deflation.  He draws his conclusion by citing advice which is a thought experiment and which I call "patently absurd" elsewhere in the post.  I also left this comment on his blog:

I am not calling for deflation, this is simply a misinterpretation of what I wrote.  Further an unemployed person with debt is even worse off than an employed person at a lower wage.  *And* even our fairly wimpy Fed is not going to allow a high rate of deflation and thus a big real increase in the debt burden.

Here is an earlier column of mine, entitled "How a Little Inflation Could Help a Lot."  While I am increasingly unsure how much good such inflation would do, I have been arguing for a year that it is worth trying and for instance just yesterday I wrote in the Brad-cited post "I favor a more expansionary monetary policy".

Spontaneous order on the road

Here’s a video of a small town in Britain that turned its traffic lights off.  Order ensued.

The experiment is not unique. Tom Vanderbilt wrote an excellent piece in The Wilson Quarterly a few years ago on traffic revolutionary Hans Monderman (see also this NYTimes piece) who has redesigned a number of city centers:

At the town center, in a crowded four-way intersection called the Laweiplein, Monderman removed not only the traffic lights but virtually every other traffic control. Instead of a space cluttered with poles, lights, “traffic islands,” and restrictive arrows, Monderman installed a radical kind of roundabout (a “squareabout,” in his words, because it really seemed more a town square than a traditional roundabout), marked only by a raised circle of grass in the middle, several fountains, and some very discreet indicators of the direction of traffic, which were required by law.

As I watched the intricate social ballet that occurred as cars and bikes slowed to enter the circle (pedestrians were meant to cross at crosswalks placed a bit before the intersection), Monderman performed a favorite trick. He walked, backward and with eyes closed, into the Laweiplein. The traffic made its way around him. No one honked, he wasn’t struck. Instead of a binary, mechanistic process–stop, go–the movement of traffic and pedestrians in the circle felt human and organic.

A year after the change, the results of this “extreme makeover” were striking: Not only had congestion decreased in the intersection–buses spent less time waiting to get through, for example–but there were half as many accidents, even though total car traffic was up by a third.

The experiments are interesting in their own right but they are also very good illustrations of spontaneous order; how order is possible without orders.

Hat tip: Dan Klein.